Comment from Karen Barrett, Founder and CEO of Unbiased.co.uk on Spring Budget
Unbiased.co.uk is a platform that enables consumers to find regulated financial advisers, from mortgage brokers, to accountants and financial advisors. Unbiased currently connects more than 27,000 trusted advisors with people in need and has helped over 10 million people to date. Unbiased recently entered into a two-year partnership with Samaritans to reduce mental health problems as a result of money worries.
CEO Karen Barrett has the below comments on the Spring Budget:
. Query budget announcement re businesses (B2B)
Hunt’s move to allow businesses to deduct 100 per cent of investments in plants, equipment, and machinery from their taxable profits will go some way to softening the blow from April’s corporation tax increase.
Hunt says that only 10 per cent of businesses will be impacted by the headline rate of corporation tax rising from 19% to 25%, but those that do could face painful future tax bills.
I would urge all business owners to speak with their accountant to ensure their making the most of any tax-deductible allowances.
Inflation announcement
The news that inflation is forecast to fall below 3% later this year is good news for borrowers and savers.
High inflation has been around for well over a year now. It’s causing our savings to erode in value, and making our mortgages are expensive. If inflation drops to a more manageable level then the Bank of England will halt interest rate rises, and may even start to lower the base rate, helping to push down our future mortgage repayments.
Economy growing forecast
While news that the UK is set to avoid a technical recession this year is encouraging, we’re not out of the woods yet. The UK economy is still expected to shrink 0.2% in 2023, and it could be some time before growth starts to pick up properly.
The chancellor’s decision to extend the energy price guarantee until June provides a timely boost for households struggling to make ends meet due to rising costs. However, with the £400 energy bill discount ending in April, families may still see their energy bills rise over the next few months.
Pension allowances
The decision to abolish the lifetime allowance caught everyone by surprise, but for many people, it was a welcome one. The LTA is not only complex but over time may have penalised hard-working savers and not just the super-wealthy.
People can now invest in a pension without fear of being hit with hefty tax charges at retirement.
The one drawback is the decision to freeze the maximums tax-free cash to 25% of the current lifetime allowance. This means that it will be capped at around £268k, and will become less valuable over time due to inflation.
By increasing the annual allowance to £60k and the money purchase annual allowance to £10k, savers now have even more scope to stick money away for retirement in a tax-free way. Hopefully, by relaxing pension allowances, Hunt will achieve his aim of plugging the UK labour shortages.
To ensure that savers are making the most of the allowances and opportunities, I would urge them to seek financial advice. Everyone’s financial needs are unique, and an expert financial planner will ensure that any decisions you make with your pension savings are right for you.
£10M Suicide prevention
We welcome the government’s decision to provide suicide prevention charities with £10m of funding over the next two years. The rising cost of living is taking a considerable toll on people’s mental health, and it’s crucial to ensure that support is available.
Unbiased recently entered into a two-year partnership with Samaritans to reduce the mental health impact of money worries. We echo the statement of Samaritans CEO Julie Bentley, who says: “Suicide rates haven’t changed in 20 years and what we desperately need to save more lives is to build on this announcement with an ambitious and well-funded national suicide prevention strategy.”